What Is a Binary Market? Yes/No Prediction Trading Explained
A binary market is a prediction market with exactly two outcomes — YES or NO. Shares pay $1 if your side wins, $0 if it doesn't.
Definition
A binary market is a prediction market with exactly two possible outcomes: YES and NO. Each YES share pays $1 if the event occurs and $0 if it does not. NO shares work in reverse.
Binary markets are the simplest and most common type of prediction market. Examples include:
- “Will BTC close above $95,000 today?” (YES/NO)
- “Will the Fed cut rates in March?” (YES/NO)
- “Will it snow in London on Christmas Day?” (YES/NO)
Price = Probability
In a binary market, the YES price directly represents the market’s estimated probability. If YES shares trade at $0.65, the crowd estimates a 65% chance the event occurs.
Because YES and NO shares always sum to $1.00, if YES is at $0.65, NO must be at $0.35.
How to Profit
- Buy YES at $0.40, event happens — you paid $0.40 per share, receive $1.00. Profit: $0.60 per share (150% return).
- Buy NO at $0.25, event doesn’t happen — you paid $0.25 per share, receive $1.00. Profit: $0.75 per share (300% return).
The maximum you can lose is your purchase price. There is no leverage, no margin calls, and no liquidation risk.
Binary Markets on Purrdict
Purrdict offers binary prediction markets on crypto prices, world events, and community questions — all powered by HIP-4 on Hyperliquid with instant on-chain settlement.